Exhibit 10.2
PURCHASE CONTRACT
THIS AGREEMENT made and entered into this 20th day of April
2000, between CORNERSTONE REALTY GROUP, INC. or its nominee, (hereinafter called
"Purchaser") and GREYSTONE CROSSING APARTMENTS, LLC, a North Carolina limited
liability company, and GCA-II, LLC, a North Carolina limited liability company,
(hereinafter GREYSTONE CROSSING APARTMENTS, LLC and GCA-II, LLC are collectively
called "Seller").
ARTICLE I
THE PROPERTY
1.1 SALE OF PROPERTY. Seller agrees to sell and convey, and
Purchaser agrees to purchase, Seller's real property known as GREYSTONE CROSSING
APARTMENTS located in Charlotte, NC, with all buildings and improvements located
thereon, as more particularly described in the attached legal description in
EXHIBIT A including, but not limited to 408 individually heated and air
conditioned apartment units (Phase I comprised of 300 units and Phase II
comprised of 108 units), with all appurtenances, together with all appliances,
drapes, carpeting, shrubbery and all other personal property used in connection
with the premises, including, the inventory of personal property to be supplied
by Seller and attached hereto as EXHIBIT B (all such real and personal property
hereinafter collectively referred to as the "Property" unless the context
clearly indicates otherwise).
ARTICLE II
PAYMENT OF PURCHASE PRICE
2.1 PURCHASE PRICE. The total purchase price shall be TWENTY
SIX MILLION EIGHT HUNDRED THOUSAND ($26,800,000) DOLLARS as evidenced by cash or
cash equivalent at closing. The parties agree to allocate the purchase price
among the purchased assets for federal and state tax purposes in accordance with
EXHIBIT C.
2.2 DEPOSIT. ONE HUNDRED THOUSAND ($100,000) DOLLARS to be
placed in escrow at the end of the "Inspection Period" described in Article VI
below. Said deposit shall be placed in escrow with the Title Company of North
Carolina or its authorized agent as an xxxxxxx money deposit which may be
credited against the purchase price or applied as per Article XI below. Any
interest which shall accrue with respect to said deposit shall accrue for the
benefit of Purchaser.
ARTICLE III
TITLE MATTERS
3.1 Marketable Title. Seller, shall convey good and marketable
title by Special Warranty Deed, in the form attached hereto as EXHIBIT D,
subject only to general taxes
for the current year not yet due and payable and utility easements which do not
interfere with the present use of the Property and the exceptions listed on
EXHIBIT G hereto ("Permitted Exceptions").
(A) Title shall be free from any and all liens or mortgages
(other than Permitted Exceptions) and Seller shall be responsible for any
prepayment penalties necessary to deliver such free title.
3.2 TITLE DEFECTS; ELECTION TO CURE. Seller shall deliver to
Purchaser a copy of its previous title insurance. If title is not marketable,
except as stated above in the preceding paragraph, Purchaser shall give written
notice of any defects in title to Seller's counsel within fifteen (15) days
after Purchaser's receipt of a title report which report shall include copies of
backup documents relating to any title exceptions, a current survey, a flood
zone certification letter and a Surveyor's Certification letter. Seller may, at
its option, elect whether to cure said defects or by written notice to Purchaser
indicate its intention not to cure.
3.3 ELECTION NOT TO CURE DEFECTS. Should Seller elect not to
cure title defects, this Agreement, at Purchaser's option, shall be void; each
party shall thereupon be released from all obligations hereunder; and all
deposits shall be immediately returned to Purchaser. If Purchaser does not elect
to void this Agreement, such defects shall become Permitted Exceptions with
respect to the Property.
ARTICLE IV
PRORATIONS
4.1 INCOME AND EXPENSE ALLOCATIONS. The following shall be
prorated, on a calendar-month basis, to the day of closing: rents and other
income from the Property; operating expenses (on such service contracts and
other obligations as Purchaser may agree to assume); and general and real
property taxes and personal and business property taxes for the year of closing
(based on the most recent assessment and the most recent levy).
4.2 CLOSING COSTS. Purchaser and Seller shall pay their
customary share of all taxes. Seller shall pay the costs of revenue stamps and
recording fees imposed on the Deed or any other documents executed in connection
with the transfer of the Property. Purchaser agrees to pay cost of title
insurance. Seller shall pay any prepayment penalty charged by the holders of any
existing notes.
4.3 ALLOCATION OF RENTS. Rents collected by Seller prior to
Closing shall be prorated as agreed in 4.1 above. Purchaser shall apply rents
received after Closing first to payment of the current rent due to Purchaser,
then to delinquent rents due to Purchaser, and last to rents due to Seller as of
the Closing but uncollected prior to settlement. Purchaser agrees to use its
best efforts in good faith to collect the amount of any rental arrears from
tenants and Purchaser agrees to remit promptly to Seller any such arrears
actually paid by such tenants to
2
Purchaser. Seller shall retain the right to commence legal action against a
tenant for any delinquent rent apportioned to the Seller.
4.4 PRIOR LEASE CONCESSIONS. If Seller has committed to give
any future monetary concessions to tenants under existing leases to which
Purchaser would become liable, then Seller shall pay to Purchaser said amount in
a lump sum at closing.
ARTICLE V
POSSESSION OF THE PROPERTY
5.1 POSSESSION. Possession of the Property shall be delivered
to Purchaser at closing, subject to the rights of the tenants under existing
leases and rental agreements.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT. (a) Purchaser's obligation to
purchase shall be subject to and contingent upon the satisfaction of the
following conditions precedent:
(A) Receipt by Purchaser of an engineering report of
building and site conditions (ordered by Purchaser at its expense), satisfactory
to Purchaser in its sole discretion, said report to include in part, a
description of any hazardous waste sites, hazardous wastes and/or hazardous
materials affecting the property. Purchaser shall have twenty-one (21) days,
pursuant to Paragraph 6.2.4, in which to review the reports set forth herein and
exercise its right to reject the Property based thereon or the right hereunder
shall be deemed waived. At Seller's request, Purchaser will provide to Seller a
copy of each engineering report prepared in connection with the Property at its
actual cost.
(B) The receipt by Purchaser of Seller documents
described in 7.2 below.
(C) On the condition that Sellers representations and
warranties described in Article VIII below remain true and correct.
(D) On the condition that there have been no material
and adverse changes to the property or leases.
(E) Seller acknowledges that Purchaser is a public
entity and that it is required to furnish financial statements to the Securities
and Exchange Commission in connection with this acquisition. Seller agrees to
make the information available for Purchaser to audit the last 12 months of
operation of the Property so that a report can be generated that is in
compliance with accounting Regulation S-X of the Securities and Exchange
Commission.
3
(F) Survey which shall show no encroachments onto the
Land from any adjacent property, no encroachments by or from the Land onto
adjacent property and no violation of or encroachments upon any recorded
building lines, restrictions or easements affecting the Property. If the Survey
discloses any such encroachment or violation, Seller shall have thirty (30) days
from the date of delivery of the Survey (with a commensurate extension of the
closing date) to have the Title Insurer issue its endorsement insuring against
damage caused by such encroachment or violation and to provide evidence thereof
to Purchaser, and if Seller fails to or is unable to have the same insured
against within such thirty (30) day period, Purchaser may elect, on or before
the Closing Date, to (i) terminate this Agreement (in which case the Xxxxxxx
Money shall be returned to Purchaser) and neither party shall have any further
liability or obligation to the other hereunder, or (ii) accept the property
subject to any such encroachment or violation.
6.2 INSPECTION. This Agreement shall be further subject to and
contingent upon Purchaser's satisfactory inspection as follows herein below.
6.2.1 PREPARATION FOR INSPECTION. Within three (3) business
days of the execution of this Agreement, Seller shall deliver to Purchaser
copies of the following: The current rent roll for the Property; detailed
statements of income and expenses with respect to the Property for the past two
years; the most recent tax bills for the Property; utility bills for the
Property for the twelve (12) months previous to the date hereof; all contract,
mortgages, and other documents creating liens of security interest on the
Property, or any part thereof and all promissory notes secured thereby; all
insurance policies applicable to the Property to include loss runs for the last
five (5) years; Plans and Specifications for the Property, service contracts,
Certificates of Occupancy, to the extent reasonably available; a copy of the
title policy and most recent survey for the Property. A copy of any
environmental or engineering reports on the property. All these items shall be
certified by Seller to be accurate and complete in all material respects to the
best of its knowledge and belief.
6.2.2 INSPECTION OF BOOKS AND RECORDS; ACCESS. Upon receipt by
Purchaser of all documents requested in the paragraph above, Purchaser, its
employees, agents and contractors shall have 21 days (the "Inspection Period")
to enter upon the Property subject to the rights of the tenants during normal
business hours for the purpose of making physical inspections thereof, including
but not limited to roofs, heating, cooling, electrical and plumbing systems,
swimming pool, appliances, and structural elements of the buildings. Purchaser
shall also be permitted to review all original leases, expense records, tenant
cards and occupancy data available. Upon the conclusion of the Inspection Period
this contract shall be deemed to be a firm agreement of purchase and sale
binding the parties hereto, except as it may be terminated by other provisions
and conditions contained herein, including but not limited to the condition
imposed by Paragraph 6.1(A) above.
6.2.3 RIGHT OF TERMINATION DURING INSPECTION PERIOD. If
Purchaser is not satisfied, in its sole and exclusive discretion, with the state
of maintenance and repair of the Property or the rents, occupancy or expenses of
the Property, or for any other reason, then
4
notwithstanding anything contained herein to the contrary, Purchaser shall have
the right to terminate this Agreement by giving written notice to Seller before
the end of the Inspection Period, and no party hereto shall have any further
liability to any other party hereto, and all deposits shall be returned to
Purchaser.
6.2.4 TERMINATION OF INSPECTION PERIOD. Notwithstanding
anything to the contrary set forth herein, the Inspection Period shall expire
twenty-one (21) days from the date of this Agreement or such other date as the
parties may agree to in writing.
6.2.5 "RENT READY". During the "Inspection Period", both
Seller and Purchaser will inspect a vacant apartment unit at the Property and
mutually agree that said apartment shall be representative of a "rent ready"
unit by which all other vacant units shall be judged for "rent ready" condition
at closing. All vacant apartment units, are to be in a "rent ready" condition
(as defined above), at the time of closing, containing, but not limited to the
following amenities, i.e., carpet, refrigerator, range, garbage disposal,
heating, plumbing and electrical systems.
6.2.6 CONDITION OF PERSONAL PROPERTY AT CLOSING. All personal
property included in the sale and all mechanical, electrical, heating, air
conditioning, sewer, water and plumbing systems will be in the same working
order at the time of closing and in the same condition as at the time of the
initial inspection by Purchaser. If Seller fails to make reasonable efforts to
conserve the property, Purchaser shall have the option of waiving such
requirement, in writing, and proceeding to closing, or Purchaser may void this
Agreement and obtain a prompt return of its deposit.
ARTICLE VII
CLOSING
7.1 CLOSING. Closing will be held seven (7) days after the
completion of the Inspection Period, at such place and at such time as the
parties may agree.
7.2 SELLER'S DELIVERIES. At closing, Seller shall execute and
deliver to Purchaser the Special Warranty Deed referred to in Paragraph 3 hereof
and shall also execute, where necessary, and deliver to Purchaser, the
following:
(A) A Xxxx of Sale, in the form attached hereto as
EXHIBIT E, with warranty of title transferring the personal property (as shown
in Exhibit B) to Purchaser free of all liens, charges and encumbrances.
(B) Originals or copies of all signed leases and
rental agreements in effect with tenants of the Property.
(C) All security and cleaning deposits made by such
tenants. Seller will give the tenants the required notice of such transfer in
compliance with the laws of NORTH
5
CAROLINA.
(D) An affidavit of Seller in such form as will cause
the Title Company to omit from the title insurance policy the exclusion relating
to unrecorded mechanic's and materialmen's liens.
(E) A rent roll certified by Seller to be true and
correct in all material respects as of the date of closing showing the name of,
and the amount of monthly rental payable, by each tenant of the Property, the
apartment occupied by the tenant, the date to which rent has been paid, any
advance payment of rent, and the amount of any escrow, or security deposit of
tenant.
(F) An affidavit of Seller that to the best of its
information and belief there are, on the date of closing, no unsatisfied
judgments, creditor's claims, tax liens, or pending bankruptcies involving
Seller.
(G) Seller shall provide a certificate from a
licensed extermination contractor, who is regularly engaged in the business of
pest control, that all buildings are free from any termite or other wood-boring
insect infestation. Said certificate shall be dated within 90 days of closing,
bearing the Contractor's name, contractors license number, the signature of the
party authorized to sign for the Contractor and the date of the inspection.
Should damage exist, Seller shall proceed to have any corrective work completed
prior to closing or Purchaser, at its option, may either proceed to settlement
and have such sums required for repairs deducted from Seller's proceeds, or may
in its sole discretion terminate this Agreement. Seller shall promptly return
Purchaser's deposit upon such termination.
(H) Assignments of all Seller's interest in the
following: (1) all assignable licenses, and permits relating to the operation of
the Property, (2) the leases and rental agreements with tenants of the Property,
(3) the existing Property telephone number and (4) the business and trade name
as set forth in Par. 1.1.
(I) Assignments of all warranties and guarantees to
the extent such are still in effect and provide Purchaser with copies of all
such warranties and guarantees without limitation for all appliances,
dishwashers, disposals, refrigerators, heating and air conditioning units.
(J) Evidence satisfactory to Purchaser that all
water, sewer, gas, electric, telephone, and drainage facilities and all other
utilities required by law or by the normal use and operation of the Property are
and at the time of closing will be installed to the property line, are and at
the time of closing will be connected pursuant to valid permits, and are and at
the time of closing adequate to service the Property and to permit full
compliance with all requirements of law and normal usage of the Property by the
tenants thereof and their licensees and invitees.
6
(K) Consent of the Seller's authorized officer to the
sale of the Property and any other approvals required under Seller's articles or
by-laws, which may affect Seller's ability to convey marketable title.
(L) Provide documents for the transfer of the
telephone, electric, water and sewer, and gas utilities, as may be required by
the utility, for execution at closing.
(M) Satisfactory evidence of the power and authority
of Seller to enter into and consummate this agreement, including but not limited
to:
(i) An opinion of Seller's counsel, in a
form satisfactory to Purchaser, stating that:
(a) The individual(s) executing the
deed and related documents are duly authorized to do all such acts as are
necessary to consummate this sale.
(b) That the officer of the manager
of the Seller can bind the Seller.
(N) Affidavit that Seller has no actual knowledge of
the presence of asbestos and/or any other hazardous material at the Property.
(O) Seller shall provide a satisfactory and valid
written termination of the management agreement executed by the existing
management and rental agent for the Property, without cost to the Purchaser.
(P) A notice letter to all the residents of the
apartment complex as to change of ownership in the form prepared by the
Purchaser.
(Q) All such other documents as are normally
transferred at settlement in the jurisdiction in which the property is located
or are reasonably requested by Purchaser or its counsel.
(R) A representation letter as normally required by
auditors for a public company in the form attached hereto as EXHIBIT F. This
clause shall survive closing for one year.
7.3 Purchaser's Deliveries. At closing and contemporaneously
with the Seller's compliance with the provisions of Section 7.2, Purchaser
shall:
(A) Pay to Seller the cash portion of the purchase
price, adjusted for the prorations, allocations and closing costs herein
provided for in Article IV. However, it is understood that SIX MILLION
($6,000,000) DOLLARS of said purchase price shall be placed
7
in escrow with Xxx Xxxxxx, Esq. ("Escrow Holder"), with offices at 500 UCB
Plaza, 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, as agent for the Title Company
of North Carolina, subject to the terms set forth in Article VIII in an
interest-bearing account with interest thereon to accrue for the benefit of the
Purchaser.
(B) Execute and deliver an assumption of obligations
under leases, securities, any contracts which may be accepted by the Purchaser
and any other obligations specifically set forth herein.
(C) Deliver to the Seller a resolution of the
Purchaser that:
(i) This Agreement has been duly authorized,
executed and delivered by the Purchaser and is a valid and binding agreement of
Purchaser, and
(ii) Purchaser has complete unrestricted
power to buy the Property from the Seller and to execute any documents required
to effectuate the transfer.
ARTICLE VIII
PHASE II ESCROW
8.1 CONDITIONS OF ESCROW. It is understood that the SIX
MILLION ($6,000,000) DOLLARS escrow referred to in Article VII, Paragraph
7.3(A), will be delivered to Escrow Holder at the time of closing. Said escrow
shall be placed in an interest-bearing account, which interest shall accrue to
the benefit of the Purchaser. Said escrow, without the interest earned thereon,
is to be released to the Seller upon the following terms and conditions:
(A) Completion of the "punch list" items for Phase II
as set forth in EXHIBIT H. Upon completion of the "punch list" items, in Exhibit
H, Seller shall give written notice of completion to Purchaser. Purchaser shall
provide Seller with written notice that Purchaser agrees that Seller has, in
fact, completed the "punch list" items in Exhibit H within ten (10) days from
receipt of Seller's notice of completion.
(B) Phase II shall have achieved eighty-five (85%)
percent occupancy.
(C) Upon compliance with the above items (A) and (B),
then within seven (7) days after Escrow Holder shall have been notified in
writing and instructed by both parties to terminate the escrow and deliver the
SIX MILLION ($6,000,000) DOLLARS to the Seller. However, the escrow shall not be
delivered for a minimum of sixty (60) days with an automatic extension of an
additional thirty (30) days unless Purchaser shall have previously notified the
Escrow Holder otherwise. Notwithstanding the foregoing, however, provided that
Section 8.1(A) has been satisfied by Seller, the escrow shall be released no
later than ninety (90) days after closing.
8
ARTICLE IX
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 REPRESENTATIONS OF THE PARTIES. Seller warrants (which
warranties shall not survive settlement unless designated to the contrary) that
as of the date of closing hereof:
(A) That Seller, is the owner in fee simple of the
Property and has the power to convey same.
(B) That Seller is not subject to any other
agreements or arrangements, with the exception of those contained in any
existing mortgage documents which would prevent Seller from selling the Property
to Purchaser. This warranty shall survive for one year following closing.
(C) All necessary action has been taken by Seller to
authorize the execution of this Agreement and the performance of the obligations
contemplated hereunder, which are not excluded elsewhere in existing mortgage
documents. This warranty shall survive for one year following closing.
(D) Seller has no actual knowledge and has not been
advised in writing that it is in default under any lease, rental agreement
service or equipment contract, or mortgage or other encumbrances relating to the
Property. This warranty shall survive for one year following closing.
(E) Seller has no actual knowledge of any material
patent or latent defect in the Property or any part thereof. This warranty shall
survive for one year following closing.
(F) Seller has no actual knowledge of any existing or
threatened litigation which relates to or which would affect the Property. This
warranty shall survive for one year following closing.
(G) The Property abuts on and has direct vehicular
access to a public road.
(H) All building and other improvements at the
Property are located entirely within the boundary lines of the Property.
(I) Seller has no actual knowledge that any part of
the Property or the operation of the Property, is in material violation or may
materially violate any governmental statute, regulation, ordinance or building
code or of any private restriction, that any governmental authority requires any
work to be done on or affecting the Property, or that any governmental
9
authority has expressed an intent to condemn or to make special improvements for
the benefit of the Property or any part thereof. This warranty shall survive for
one year following closing.
(J) That to the best knowledge of the Seller, the
drainage within the project is satisfactory and complies in all respects with
all government regulation. This warranty shall survive for one year following
closing.
(K) That Seller is not a "foreign person" within the
meaning of the Internal Revenue Code of 1986, as amended (the "Code"), and that
Seller will furnish to Purchaser prior to closing an affidavit in form
satisfactory to Purchaser confirming the same.
(L) That to the best of Seller's knowledge, the
Property was never utilized as a disposal site for hazardous waste products and
will furnish to Purchaser an affidavit confirming same.
(M) Seller covenants and agrees that, between this
date and the date of closing, Seller shall continue to maintain, operate and
manage the Property in a manner consistent with its prior practices, making
every reasonable effort to do nothing which might damage the reputation of the
Property or the relationships with the tenants. Seller shall not permit the
modification, extension or cancellation of any tenant lease (except in
accordance with the terms of such lease) or any dealing with any tenant other
than the ordinary course of managing the Property, without the prior written
consent of Purchaser. If the leases of any tenants expire before thirty (30)
days after the date of closing, Seller shall, up to the date of closing and
without cost to the Purchaser, continue its normal course of operation with
respect to causing tenants to be obtained for apartments which are unrented.
9.2 CONTINUATION OF REPRESENTATIONS, WARRANTIES AND COVENANTS
TO THE DATE OF CLOSING. If each of the warranties set forth in this section does
not remain true up to and including the time of closing as to any material
matters, this Agreement, at Purchaser's election, shall be terminated, Seller
shall return all payments made by Purchaser, or Purchaser may elect to close the
sale and waive failure of the warranties. If Purchaser shall have knowledge at
closing of the breach of a representation, warranty, covenant or agreement made
for its benefit herein or in any other document delivered herewith and elects
not to terminate this Agreement but proceed to closing, Purchaser shall be
deemed to have waived the breach of such representation, warranty, covenant or
agreement and Seller shall have no liability with respect thereto.
9.3 BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Notwithstanding the provisions of 9.2 above, Seller shall indemnify Purchaser
for all reasonable costs incurred as a result of the failure of any of Seller's
representations, warranties or covenants contained herein to remain true as of,
which failure occurs between the date of closing from the date of termination of
the Inspection Period and the date of closing.
10
ARTICLE X
CONDEMNATION; RISK OF LOSS
10.1 PROPERTY DAMAGE. If, prior to closing, any part of the
Property is damaged by fire or other casualty in an amount not greater than TWO
HUNDRED THOUSAND ($200,000) DOLLARS, Purchaser agrees to accept the Property
with an assignment of: (i) the insurance proceeds, (ii) any deductible, and
(iii) rent loss insurance proceeds. Seller shall have the option to repair such
damage before the date provided herein for Closing. In the event that the damage
as a result of fire or other casualty cannot be reasonably repaired by such
time, this Agreement may be canceled at the option of the Purchaser. In the
event of cancellation as aforesaid, this Agreement shall become null and void
and the parties shall be released and all payments made shall be returned.
Should Purchaser elect to carry out this Agreement despite such damage Seller
shall assign to Purchaser all insurance proceeds and any deductible arising from
such damage and will compensate Purchaser for lost rent collections to the
extent of insurance proceeds received. Seller shall promptly notify Purchaser in
writing upon the occurrence of any such damage.
10.2 CONDEMNATION. In the event of any actual or threatened
taking, pursuant to the power of eminent domain, all or any part thereof, or any
actual or proposed sale in lieu thereof, the Seller shall give written notice
thereof to the Purchaser promptly after Seller learns or receives notice
thereof. Upon a taking of a material part of the Property greater than TWO
HUNDRED THOUSAND ($200,000) DOLLARS or any part of the building or more than 5%
of the parking area, Purchaser may elect to either (a) terminate this Agreement,
in which event the deposit shall be immediately returned to Purchaser and all
other rights and obligations of the parties hereunder shall terminate
immediately, or (b) waive its right to terminate this Agreement and proceed to
closing, in which event all proceeds, awards and other payments arising out of
such condemnation or sale (actual or threatened) shall be paid to the Purchaser
at Closing, if such payment has been received. If payment has not as yet been
received, but an amount has been agreed upon, Seller shall assign the claim to
Purchaser.
10.3 RISK OF LOSS. Prior to closing, all risks of loss or
damage by every casualty shall be borne by the Seller.
ARTICLE XI
BROKER
11.1 BROKER. Seller and Purchaser represent and warrant to
each other that no broker brought about this transaction and, therefore, no
brokerage fees are or shall be owing in connection with this transaction. Seller
and Purchaser agree to hold each other harmless in connection with any such
brokerage fees.
11
ARTICLE XII
DEFAULT
12.1 DEFAULT DEFINED. Default for the purpose of this
Agreement shall mean any deliberate or intentional failure by Seller or
Purchaser to fulfill all the terms, conditions and covenants contained herein,
however, it shall not be an event of default for either party to exercise its
rights to terminate this contract as contained in other provisions herein.
12.2 SELLER'S DEFAULT. Upon Seller's default, the Purchaser,
at it's election, may either (1) require specific performance of Seller, or
pursue its other remedies at law or equity, (2) cancel this Agreement and obtain
a prompt return of the deposit, in which case this Agreement shall be terminated
and the parties released from all obligations hereunder, or (3) the Purchaser
may waive such defaults and proceed to settlement. Seller shall indemnify
Purchaser for any reasonable costs incurred by Purchaser if Purchaser elects to
pursue its option (1) noted above, to include reasonable attorney fees.
12.3 PURCHASER'S DEFAULT. Upon Purchaser's default, this
Agreement shall be terminated and both parties released from all obligations
hereunder, and the deposit shall be retained by the Seller as liquidated
damages. Such amount and terms are agreed upon by and between Seller and
Purchaser as liquidated damages, due to the difficulty and inconvenience of
ascertaining and measuring actual damages, and the uncertainty thereof, and the
payment of the deposit and the terms provided herein shall constitute full
satisfaction of Purchaser's obligations under this Agreement. Such amount is
agreed upon by and between Seller and Purchaser as a reasonable estimate of just
compensation for the harm caused by Purchaser's default. Seller shall have no
other remedy against Purchaser in the event of Purchaser's default.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties; it supersedes all previous agreements and
representations which are deemed merged herein and may not be modified except in
writing.
13.2 ASSIGNMENT. Purchaser may assign all of its rights, but
not its obligations under this Agreement to a limited liability company without
the consent of Seller.
13.3 LIKE KIND EXCHANGE. Purchaser has advised Seller that
Purchaser is purchasing the Property to complete a like kind exchange
transaction under Section 1031 of the Internal Revenue Code of 1986, as amended.
Seller agrees to assist Purchaser in effecting such like kind exchange;
provided, however, that all costs incurred to effect such like kind exchange
shall be borne solely by Purchaser. Seller has advised Purchaser that Seller may
desire to effect a like kind exchange transaction under Section 1031 of the
Internal Revenue Code of 1986, as
12
amended, with respect to some or all of the Property being purchased by
Purchaser. If Seller elects to effect a like kind exchange with respect to some
or all of the Property, Purchaser agrees to assist Seller in effecting such like
kind exchange; provided, however, that all costs incurred to effect such like
kind exchange shall be borne solely by Seller.
13.4 SEVERABILITY. If any provision, sentence, phrase or word
of this Agreement or the application thereof to any person or circumstance shall
be held invalid, the remainder of this Agreement or the application of such
provision, sentence, phrase, or word to persons or circumstances, other than
those as to which it is held invalid, shall remain in full force and effect.
13.5 BINDING EFFECT. The parties to the Agreement mutually
agree that it shall be binding upon and inure to the benefit of their respective
heirs, representatives, successors in interest and assigns.
13.6 CONTROLLING LAW. It is the intent of the parties hereto
that all questions with respect to the construction of this Agreement and the
rights and liabilities of the parties shall be determined in accordance with the
provisions of the laws of the State set forth in Par. 1.1.
13.7 COUNTERPARTS. To facilitate execution, this Agreement may
be executed in as many counterparts as may be required. It shall not be
necessary that the signature on behalf of both parties hereto appear in each
counterpart hereof, and it shall be sufficient that the signature on behalf of
both parties hereto appear on one or more such counterparts. All counterparts
shall collectively constitute a single contract.
13.8 INCORPORATION BY REFERENCE. All of the Exhibits referred
to herein and/or attached hereto shall be deemed to constitute a part of the
Agreement.
13.9 HEADINGS. The headings of the Articles and sections
hereof are inserted for convenience only and shall not be deemed to constitute a
part of the Agreement.
13.10 CONSTRUCTION OF CONTRACT. Each party hereto have
reviewed and revised (or requested revisions of) this Agreement, and therefore
the normal rule of construction that any ambiguities are to be resolved against
a particular party shall not be applicable in the construction and
interpretation of this Contract or any amendments or exhibits hereto.
13.11 EXHIBITS. The following exhibits are attached to this
Agreement and are incorporated into this Agreement by this reference and made a
part hereof for all purposes:
EXHIBIT A, legal description of the land
EXHIBIT B, list of personal property
EXHIBIT C, purchase price allocation
EXHIBIT D, form of Deed
13
EXHIBIT E, (i) form of Xxxx of Sale, (ii) Assignments
and Assumptions of Leases, etc.
EXHIBIT F, form of Representation Letter
EXHIBIT G, Permitted Exceptions
EXHIBIT H, Phase II Punch List Items
ARTICLE XIV
NOTICE
14.1 NOTICE. All notices required or permitted to be given
under this Agreement shall be in writing and shall be sent or delivered to the
address set forth below (or such other address as may be hereafter specified in
writing):
To Seller: Xx. Xxxxxxx X. Xxxxxxx
State Street Companies, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to
Seller's Attorneys: C. Xxxx Xxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
To Purchaser: Xx. Xxx Xxxxxxxx
Cornerstone Realty Group, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to
Purchaser's Attorneys: Xxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxxx & Xxxxxxxxxx
000 Xxxxxxxx Xx., X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
-and-
14
Xxx Xxxxxx, Esq.
Xxxxxxx, Xxxxxx & Xxxxxxx
500 UCB Plaza
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
13.2 DELIVERY OF NOTICE. Notices sent either by Registered or
Certified Mail, Return Receipt Requested, or by overnight express mail shall be
deemed given when deposited in the United States Mail, postage prepaid,
delivered to a reliable overnight courier or by facsimile transmission. Notices
sent in any other manner shall be deemed given only when actually delivered at
the specified address.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
this Agreement to be executed this day and date first written above.
SELLER:
GREYSTONE CROSSING APARTMENTS, LLC
By: STATE STREET COMPANIES, INC., Manager
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
Its: President
-------------------------------------
GCA-II, LLC
By: STATE STREET COMPANIES, INC., Manager
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
Its: President
-------------------------------------
PURCHASER:
CORNERSTONE REALTY GROUP, INC.
By: /s/ Xxx X. Remppies
-------------------------------------
Its: V. P. 4-20-00 GGR
-------------------------------------
15
FIRST MODIFICATION TO PURCHASE CONTRACT
This First Modification to Purchase Contract ("Modification") is made
and entered into this 9th day of May 2000 between CORNERSTONE REALTY GROUP, INC.
or its nominee (hereinafter called "Purchaser") and GREYSTONE CROSSING
APARTMENTS, LLC and GCA-II, LLC (hereinafter collectively called "SELLER").
WHEREAS, Purchaser and Seller entered into a Purchase Contract on the
20th day of April 2000 ("AGREEMENT"); and
WHEREAS, Purchaser and Seller now desire to modify and amend the
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, Seller and Purchaser agree as follows:
1. All terms not specifically defined herein shall have the same
meaning as ascribed to them in the Agreement unless previously modified.
2. ARTICLE VIII, Paragraph 8.1(C), is hereby amended to read as
follows:
"(C) Upon compliance with the above items (A) and (B), then
within seven (7) days after Escrow Holder shall have been notified in
writing and instructed by both parties to terminate the escrow and
deliver the SIX MILLION ($6,000,000) DOLLARS to the Seller. However,
the escrow shall not be delivered for a minimum of sixty (60) days with
an automatic extension of an additional sixty (60) days unless
Purchaser shall have previously notified the Escrow Holder otherwise.
Notwithstanding the foregoing, however, provided that Section 8.1(A)
has been satisfied by Seller, the escrow shall be released no later
than one hundred twenty (120) days after closing."
3. Except as herein modified, the terms and provisions of the Agreement
shall remain in full force and effect.
4. In the event there is any conflict in the terms of this Modification
and the terms of the Agreement, the terms of this Modification shall govern.
5. This Modification may be executed in separate counterparts, each of
which shall be deemed an original and all of which taken together will
constitute one agreement between the parties hereto.
16
IN WITNESS WHEREOF, the parties hereto have executed this Modification
on the date first above written.
SELLER:
GREYSTONE CROSSING APARTMENTS, LLC
By: STATE STREET COMPANIES, INC., Manager
By: /s/ Xxxxxxx Xxx
----------------------------------
Its: V. P.
----------------------------------
GCA-II, LLC
By: STATE STREET COMPANIES, INC., Manager
By: /s/ Xxxxxxx Xxx
----------------------------------
Its: V. P.
----------------------------------
PURCHASER:
CORNERSTONE REALTY GROUP, INC.
By: /s/ Xxx X. Remppies
----------------------------------
Its: V. P.
----------------------------------
17
